Direct vs bottom–up approach when forecasting GDP: Reconciling literature results with institutional practice

C-Tier
Journal: Economic Modeling
Year: 2013
Volume: 33
Issue: C
Pages: 416-420

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

How should we forecast GDP? Should we forecast directly the overall GDP or aggregate the forecasts for each of its components using some level of disaggregation? The search for the answer continues to motivate several horse races between these two approaches. Nevertheless, independently of the results, institutions producing short-term forecasts usually opt for a bottom–up approach. This paper uses an application for the euro area to show that the option between direct and bottom–up approaches as the level of disaggregation chosen by forecasters is not determined by the results of those races.

Technical Details

RePEc Handle
repec:eee:ecmode:v:33:y:2013:i:c:p:416-420
Journal Field
General
Author Count
1
Added to Database
2026-01-25